Friday, April 12, 2013

Investment in Africa

Currently Africa's economy is on the rise given its strong growth of GDP, particularly in market regions such as Nigeria and Kenya. Where their main markets have risen by close to 50% in the past year alone. Specifically over the past three years the Sub-Saharan region of Africa's GDP has risen by 5% and with this increase in GDP consumption has also been increasing and families that use to barely survive on minimal necessities now have the income to spend on non-essential items creating opportunities for investors. Due to half of Africa's population being under the age of 20 within the next few decades Africa is projected to have a larger working-age population than China. Despite this improvement, Africa's national savings and capital are still small and this helps create the opportunity for investors to capitalize on great rates of return on their investments. Interestingly, in Africa financial returns originate from revenue growth efficiency gains as opposed to the more typical way of financial engineering, as stated by Runa Alam (head of a private-equity firm in Africa). A single-country firm now has the opportunity to transform their company into a regional one in a short amount of time.

http://www.economist.com/news/finance-and-economics/21575769-strategies-putting-money-work-fast-growing-continent-hottest



1 comment:

  1. I also read about this in my International business class. Africa is indeed a very lucrative place ot make investment in, but I feel that (with all the political turmoil and what not) the risk of investment is greater than the reward; most of these figures combine Africa, as a continent and compare them to individual countries like China, thereby giving a somewhat distorted view of reality.

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